Question 5. A bank has borrowing needs at time T > 0. Show that by combining an FRA trade today with a libor loan at time T, the bank can today lock in its interest cost for the period T to T +a. Does the borrowing bank need to buy or sell the FRA to do this? What is the fixed rate that the bank locks in? Question 5. A bank has borrowing needs at time T > 0. Show that by combining an FRA trade today with a libor loan at time T, the bank can today lock in its interest cost for the period T to T +a. Does the borrowing bank need to buy or sell the FRA to do this? What is the fixed rate that the bank locks in